The Oregon Natural Resources Report - Agricultural News from Oregon

California: Corn Ethanol Court Victory

Corn growers and the grain-based ethanol industry got a late Christmas present last week when a Federal District Court judge in Fresno, California sided with America’s ethanol industry in ruling that the State of California’s Low Carbon Fuel Standard (LCFS) violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional. The ruling is in response to a suit filed in December 2009 by the Renewable Fuels Association and Growth Energy asserting that the LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states.

“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”

The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The original filing notes that “the LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security. One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS.”

On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. The judge also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

The California Air Resources Board (CARB) is expected to automatically appeal the ruling to the U.S. Court of Appeals for the 9th Circuit and the industry is prepared to continue the fight to provide clean corn ethanol for all Americans.